Indonesia’s Peatlands Face Rising Flood Risk from Land Conversion

While peatland degradation has long been associated with catastrophic forest fires and haze across Southeast Asia, a new report from the NGO network Pantau Gambut reveals a lesser-known yet equally urgent threat: increased flooding. The 2025 study, titled “Tenggelamnya Lahan Basah” (Sinking Wetlands), identifies how damaged peat ecosystems—especially in Sumatra, Kalimantan, and Papua—have lost their ability to regulate water, contributing to widespread inundation.

Peatlands, which naturally store massive amounts of carbon and act as sponges for tropical rainfall, are being drained and converted at scale for industrial plantations, mining, and infrastructure. This not only increases emissions but also leads to land subsidence and hydrological collapse, creating a perfect storm of flood risk for coastal and inland communities alike.

Quantifying the Vulnerability

Pantau Gambut’s analysis covers three regional peat hydrological units (KHGs), using GIS mapping and multi-criteria evaluation (MCE) to assess environmental vulnerability. According to the findings:

• 25% of all studied peatland hydrological areas are now categorized as high flood risk.
• Central Kalimantan, West Kalimantan, and South Sumatra are the most affected provinces.
• In areas like Riau and South Kalimantan, even modest rainfall can trigger significant flooding due to subsided, degraded land.
• Coastal areas such as Meranti Islands and Dumai City are increasingly suffering from tidal floods (“banjir rob”) not linked to rainfall but to seawater intrusion.

Notably, the research links degradation to corporate land concessions. Nearly 48% of Indonesia’s total peat hydrological zones fall within company-held concessions—especially for palm oil and pulpwood production.

Implications for Industry and Regulation

The report emphasizes that peatland policy has focused too narrowly on fire prevention, overlooking the broader hydrological consequences of ecosystem collapse. It calls for integrated planning that includes flood risk indicators, not just carbon metrics.

For the private sector, this carries weighty implications. Companies sourcing from peatland areas may face reputational and physical risks from flooding, and new global regulations—like the EU Deforestation Regulation (EUDR)—could require expanded due diligence on hydrological impact, not just deforestation footprints.

“Flooding is not just a natural disaster—it is often a direct result of how landscapes are managed,” the authors state, urging a rethink of how sustainability and disaster preparedness intersect in tropical peat zones.

Recommendations Moving Forward

Pantau Gambut outlines a series of policy and institutional reforms:

• Integrate peat protection into Indonesia’s national development plans (RPJMN) and align disaster maps with hydrological degradation data.
• Expand corporate liability beyond fire damage to include flood risks from land conversion.
• Urge financial institutions to adopt environmental risk indicators, including subsidence and water table height, in lending criteria—particularly through Indonesia’s Sustainable Finance Taxonomy (TKBI).
• Define “deforestation” in international policy to include hydrological degradation in peatlands—not just canopy cover loss.

Climate Impact and Environmental Compliance

As climate impacts intensify and environmental compliance tightens across global supply chains, the case of Indonesia’s sinking wetlands offers a powerful reminder: climate resilience starts with ecosystem integrity. Peatlands may be wet by nature, but unmanaged drainage, corporate concessions, and overlooked policies are causing them to drown—along with the communities and industries that depend on them.